Busen Insider Upgrade: The Incumbent Director Is Diligent And Responsible To Strive For Losses In 2019.

Busen shares (SZ002569) continued to reverse and upgrade. In response to the proposal of the new chief shareholder to remove directors such as Zhao Chunxia, the incumbent board made a counterattack.


On the night of July 1st, *ST Busen issued a notice on the shareholders' proposal to convene the first provisional shareholders' meeting in 2019. The announcement made a reply to the letter on request for temporary shareholders' meeting issued by Wang Chunjiang, Li Ming and others in June 21st (hereinafter referred to as the "proposal letter").


The proposed letter shows that 5 shareholders holding 14.7% shares -- Busen Group Co., Ltd. (holding 2.66%) and Wang Chun Jiang are entrusted by shareholders of listed companies, Meng Xianglong (4.31%), and Zhang Xu (holding 3.29%), entrusted by the shareholders of the Chongqing listed company, Sanxin (holding 2.92%) and Zhang Xing Liang (1.52% shareholding) of the listed companies of the Li Mingshou group, jointly sent a letter to the board of directors of the company to convene the first provisional shareholders' meeting in 2019, calling for the recall of the chairman Zhao Chunxia, the general manager, the chief financial officer, and the non independent director, Bai Liang, Su Hong, Li Xin, Meng Fanqi, supervisor Pan Yi, and Meng Fanqi.


In May of this year, Beijing Dongfang Heng Zheng technology and Trade Co., Ltd. (hereinafter referred to as "Dongfang Heng Zheng") took 22 million 400 thousand shares of listed companies held by the technology through auction and became the largest shareholder of *ST Busen.


The recall proposal was seen as a "clean-up" of the management of listed companies as a control.


The current board of directors of Busen shares pointed out that the company was unable to verify whether Li Ming and Wang Chunjiang had obtained all the authorization of the relevant shareholders to entrust their proposal to convene the provisional shareholders' meeting. According to the articles of association, the proposal letter should be accompanied by a proposal letter from the relevant shareholders entrusted by Li Ming and Wang Chunjiang to exercise the proposal to convene the provisional shareholders' meeting, but the proposer has not yet provided all the documents to the company.


In addition, the incumbent board believes that the incumbent directors and supervisors of Busen shares are diligent and conscientious in performing their duties and do not appear to be unsuitable for directors and supervisors in accordance with laws and regulations. The proposal does not provide grounds for calling for the removal of relevant directors and supervisors, and the proposal will damage the overall interests of other shares of the company and the company.


The board also mentioned in particular that the Fifth Board of directors and board of supervisors of the company are taking measures in the aspects of business and strategic development, risk prevention and control, and settlement, so as to make profits in 2019 and eliminate the risk of delisting as soon as possible so as to protect the legitimate rights and interests of all shareholders, especially small and medium-sized shareholders.


Based on the above, the incumbent board asks the proposer to re-examine and comprehensively assess the serious adverse consequences which may result from other shareholders and listed companies. It is considered that there are no conditions for holding the company's provisional shareholders' meeting and deliberating relevant proposals.


It is worth mentioning that *ST Busen real controller Zhao Chunxia was deeply involved in the P2P platform overdue investment crisis, and has not appeared for nearly a year.


Last July, Zhao Chunxia's love investment began to be overdue. At present, the official website revealed that as of June 2, 2019, the balance of love investment and lending was 12 billion 970 million yuan, overdue amount of 9 billion 760 million yuan, and the total amount of compensation was 5 billion 480 million yuan.


After a huge overdue period, the love investment has repeatedly made public "debt collection" in the form of announcements and live broadcast, and has sued the enterprises owed debts. According to incomplete statistics, 002220.SZ, *ST rich 600634.SH (600634.SH), *ST Tianye (600807.SH), Ren Zhi share (002629.SZ), Golden Shield (300411.SZ), Galaxy bio (000806.SZ), Tiancheng holding (600112.SZ), *ST quasi oil (002207.SZ) and other listed companies are involved.


In August 15th last year, the Zhejiang Securities Regulatory Commission issued a notice of conversation to *ST Busen to meet with the chairman of the company, Zhao Chunxia, but Zhao Chunxia had not yet participated in the talks.


In June this year, the Zhejiang Securities Regulatory Commission issued a letter of inquiry, asking *ST Busen to explain the specific reasons why Zhao Chunxia has not participated in the talks so far, to explain whether Zhao Chunxia has left the country at present, and to ask whether Zhao Chunxia has the qualification to continue to serve as chairman of the company in the past year's performance. In response, *ST Busen replied that Zhao Chunxia was being treated overseas because of his health and was unable to participate in the talks in person. However, he maintained regular and timely communication with the SFC regulators.


For specific details, *ST Busen said Zhao Chunxia had no permanent residence and would return home as soon as the treatment was over and the situation was stable. It was announced that Zhao Chunxia was not unsuitable for continuing to serve as chairman of the board. At the same time, the announcement revealed that love investment has not been placed on file, and the listed companies and love investment have no capital business.